Washington accused of stalling new ferries

SEATTLE – A Tacoma shipbuilder has filed a claim against the state Department of Transportation and Washington State Ferries – a possible precursor to a $2.5 million lawsuit – accusing the agencies of bias and of stalling replacement of four ferries built in the 1920s.

J.M. Martinac Shipbuilding also claims that Transportation Secretary Doug MacDonald has waged a vendetta against the company, obstructing its bid to replace the aging “Steel Electric” ferries, which Martinac says are out of compliance with U.S. Coast Guard requirements.

The company has accused MacDonald, state Ferries Director Mike Anderson and others of being willing to squander tens of millions of tax dollars to keep the old vessels in service, even though the governor and Legislature demanded nearly five years ago that they be replaced.

MacDonald adamantly denies the allegations. If there is an obstructionist, he says, it’s Martinac, which has objected throughout the process.

“Nobody in Puget Sound is more mindful that we need to move forward with the procurement of these boats,” MacDonald said. “So to be accused of trying to stall this process is met here with a certain amount of head scratching.”

The Steel Electric boats – the M/V Klickitat, the M/V Illahee, the M/V Nisqually and the M/V Quinault – were built in 1927.

One of the claims involves “Safe Harbor Leases,” through which the Department of Transportation sold depreciation rights to those vessels to investors. Violating the leases before they expire in 2014 could cost the state millions, according to the claim. Martinac contends the existence of the leases has been kept secret from the governor and other state officials.

In order to continue to hide them, the claim alleges, MacDonald and others intentionally put off replacing those ferries. In doing so, Martinac said, MacDonald has “engaged in a smear campaign” against the shipbuilder and undermined its bid to replace the ferries.

MacDonald says the Safe Harbor Lease issue is a red herring. The leases are not secret, he said, and they allow for the early retirement of the Steel Electric ferries.

The claim was filed earlier this month with the state’s Risk Management Division.

If the state rejects the claim – it has 60 days to do so – Martinac intends to sue the state in Pierce County Superior Court, seeking recovery of its $2.5 million investment in trying to meet the state’s “moving target” requirements for bidders, Martinac attorney Jed Powell said Friday. The claim was filed under the federal Racketeer Influenced and Corrupt Organizations Act, which would mean triple damages if Martinac prevails, Powell said in Seattle.

Martinac submitted a bid in 2002 to replace the four ferries for $242 million.